Google is making itself at home in Microsoft territory, otherwise known as the desktop. On Wednesday, at the Goldman Sachs Annual Internet Conference, Google CEO Eric Schmidt confirmed longstanding rumors that his company plans to partner with Dell to install Google search software on Dell computers.

"In fact, we have signed the deal," said Schmidt. "It's a big, big deal for both companies."

The multiyear, worldwide pact will involve tens of millions of computers, Schmidt said, adding, "The real reason to do this is the end-user benefit."

There are some real benefits, however, for both Google and Dell.

Google has fretted in recent months that Microsoft plans to leverage its home-field advantage in its upcoming Microsoft Vista operating system by promoting its own search technology over Google's.

At a Google press event two weeks ago, company co-founder Sergey Brin pointed to what he called Microsoft's past anti-competitive behavior and expressed concern that history could repeat itself. But the fact that Dell is partnering with Google in this instance suggests such fears may be overstated.

For its part, Dell gets to cash in on its dominance of the PC market. Schmidt declined to discuss specifics of the deal other than to say it involved the sharing of Internet advertising revenue. According to the Wall Street Journal, which in February first reported that the two companies were in talks, Google will be paying a fee for each PC outfitted with its software.

Dell spokesperson Jess Blackburn declined to confirm the financial details of the arrangement.

The deal calls for Dell PCs to come with Google Desktop and Google Toolbar preinstalled. It also stipulates that Microsoft Internet Explorer 6 will be set to use a Google home page. Blackburn couldn't immediately confirm the extent of Dell's brand presence on that page.

Google's enterprise division should benefit as well. Schmidt said Google plans to offer Google Desktop for Enterprise, its search software with corporate administrative controls, to Dell's SMB and enterprise customers. Large corporate customers that provide Dell with a specific disk image for preinstallation will only get Google software if they ask for it.